This FFP meeting TB is going to

[Arkwright]

All that is needed is for different FFP limits to be applied to parachute teams, and non-parachute teams.

ie

Parachute team 1 has a permitted loss of 8 million pounds.
Non-Parachute team 2 has a permitted loss of 31 million pounds ( 8 million + 23 million ).

A level playing field once more. Job done.

While I sort of agree why not just have it written into players
contracts if they get relegated the salary is reduced to the capped salary in the Championship. Yep, I think all players salaries should be capped according to the league / division, that's more of a level playing field.

 

[sparkie]

What you're talking about there though is a slight weird version of an absolute, rather than relative, limit. The problem is that allows us to compete on an even keel with the likes of Norwich, but not for say Rotherham (if they come up) to compete with either. If you want to go down the absolute limit angle, then simply set a total wage bill that no club is allowed to exceed; e.g. £20m per annum. Make it a condition of membership that wage bills are capped at that much (obviously with a tapered introduction to allow contracts to run out, etc.) by requiring each team to name a maximum squad of 25 (or whatever number) meeting that condition. Then owners can run up as big a loss as they like, but they won't (easily) be improving the competitiveness of the team versus the other top teams.

While I sort of agree why not just have it written into players
contracts if they get relegated the salary is reduced to the capped salary in the Championship. Yep, I think all players salaries should be capped according to the league / division, that's more of a level playing field.

These could both work as well.

What doesn't work is the current 'imperfect storm' of low FFP permitted losses, and sky high parachute payments.

 

[sten_super]

These could both work as well.

What doesn't work is the current 'imperfect storm' of low FFP permitted losses, and sky high parachute payments.

That depends what the aim is. It seems to me that the aim of FFP as it currently stands is to encourage good financial management (i.e. solvency), and discourage dependency upon either loans or gifts from chairmen. It's clearly NOT aimed at encouraging a level playing field. However the kind of system I proposed above (an absolute limit) does the latter at the expense of the former; so you end up with a competitive league, but not necessarily good financial management/solvency.

 

[sparkie]

That depends what the aim is. It seems to me that the aim of FFP as it currently stands is to encourage good financial management (i.e. solvency), and discourage dependency upon either loans or gifts from chairmen. It's clearly NOT aimed at encouraging a level playing field. However the kind of system I proposed above (an absolute limit) does the latter at the expense of the former; so you end up with a competitive league, but not necessarily good financial management/solvency.

If it's not aimed encouraging a level playing field then surely the name ' Financial Fair Play ' is wrong, and the 'Fair Play' bit should be replaced with something else

 

[mikeyjh]

All that is needed is for different FFP limits to be applied to parachute teams, and non-parachute teams.

ie

Parachute team 1 has a permitted loss of 8 million pounds.
Non-Parachute team 2 has a permitted loss of 31 million pounds ( 8 million + 23 million ).

A level playing field once more. Job done.

Where's the £23m coming from?

 

[sparkie]

Where's the £23m coming from?

23 million is the new maximum parachute payment a team gets next season. The above is just an example picking teams at each end of the scale, different teams will have different levels of payments. For example, Reading will get a 'mere' 18 million next year ( I think ).

There are surely many other ways of re-thinking this, it's just the current 'Fair Play' system is fatally flawed.


It just doesn't work on so many levels. An example :


Reading are in financial meltdown currently. Surely they should have used their parachute to shore up their finances, not sign a new player - Wayne Bridge - on massive wages last summer

 

[mikeyjh]

23 million is the new maximum parachute payment a team gets next season. The above is just an example picking teams at each end of the scale, different teams will have different levels of payments. For example, Reading will get a 'mere' 18 million next year ( I think ).

There are surely many other ways of re-thinking this, it's just the current 'Fair Play' system is fatally flawed.

I think I'm confused then, your original post mentioned this - 'Non-Parachute team 2 has a permitted loss of 31 million pounds ( 8 million + 23 million )'

 

[sparkie]

I think I'm confused then, your original post mentioned this - 'Non-Parachute team 2 has a permitted loss of 31 million pounds ( 8 million + 23 million )'

It's only a quick idea - basically different FFP limits depending on the size of the parachute.

ie Size of Parachute + Permitted FFP Loss = 31 million.

so

Norwich : 23 million Parachute + 8 million permitted FFP loss = 31 million.
Reading : 18 million Parachute + 13 million permitted FFP loss = 31 million.

Non Parachute payment team : 0 Parachute + 31 million permitted FFP loss = 31 million.


If the idea is 'Financial Fair Play' then this must come close.


If the idea is something else, then perhaps rename the scheme and set out a different proposal

 

[mikeyjh]

It's only a quick idea - basically different FFP limits depending on the size of the parachute.

ie Size of Parachute + Permitted FFP Loss = 31 million.

so

Norwich : 23 million Parachute + 8 million permitted FFP loss = 31 million.
Reading : 18 million Parachute + 13 million permitted FFP loss = 31 million.

Non Parachute payment team : 0 Parachute + 31 million permitted FFP loss = 31 million.


If the idea is 'Financial Fair Play' then this must come close.


If the idea is something else, then perhaps rename the scheme and set out a different proposal

I've bolded the bit I'm struggling with, where is this £31m coming from?

 

[sparkie]

I've bolded the bit I'm struggling with, where is this £31m coming from?

Now I think I'm struggling to understand what you are getting at with your question.

31 million is the loss permitted under FFP in my ( quick )proposal for a non parachuted team.


Do you mean where does the funding for this loss come from, or why is the figure 31 million specifically as opposed to, for example, 30 million ?

If it's where the money comes from then I'd say any legal source would be permissible, but you could well take a view that restrictions need to also be applied to the level of ongoing debt a club gets into.

 

[Guy Fawkes]

The main issue is see is that if an owner wants to pump millions into a club then they should be allowed to but they should be guarenteed by the owner. But what shouldn't be allowed is a club continuing to run up unsecured debts (which could be due to the interest owed on existing debts and not necessarily due to player investment and trying to secure promotion to the top flight)

There needs to be a better system to deal with clubs that fail due to their debts, they shouldn't be able to write most of it off and carry on from where they were before. If the penalty for failure financially was severe enough, it could and hopefully should help force clubs to be run in a much more financially stable and sustainable fashion.

Rather than a points deduction, there should be a demotion of at least 2 divisions (if not more). Players contracts arn't the priority when it comes to any administration process as they are now so if this happens, they should be paid out in the same way that claims by everyone else including small businesses, etc are resolved (ie ?p in the pound)

Club losses should be available for potential signings to see before joining a club so that they can question if the club is secure finacially and they are likely to be paid fully for their services over the full period of their contract. This way they have to weigh up the risks of signing for a team with a big debt, knowing that should the club go bust, that they will not get everything they are owed, meaning that clubs that can afford the better players will be able to sign them (hopefully this would have with the wage inflation problem too)

 

[mikeyjh]

Now I think I'm struggling to understand what you are getting at with your question.

31 million is the loss permitted under FFP in my ( quick )proposal for a non parachuted team.


Do you mean where does the funding for this loss come from, or why is the figure 31 million specifically as opposed to, for example, 30 million ?

If it's where the money comes from then I'd say any legal source would be permissible, but you could well take a view that restrictions need to also be applied to the level of ongoing debt a club gets into.

This bit is my problem, I'm not sure it's fair if, for example, Derby's ownership group say fine here's £31m, go and spunk it up the wall while Mr Bloom says enough's enough, you're not getting £31m of my cash. While in some cases this may create a bridge between the haves and have nots, in others it may simply widen the gap.

 

[Rugrat]

The main issue is see is that if an owner wants to pump millions into a club then they should be allowed to but they should be guarenteed by the owner. But what shouldn't be allowed is a club continuing to run up unsecured debts (which could be due to the interest owed on existing debts and not necessarily due to player investment and trying to secure promotion to the top flight)

There needs to be a better system to deal with clubs that fail due to their debts, they shouldn't be able to write most of it off and carry on from where they were before. If the penalty for failure financially was severe enough, it could and hopefully should help force clubs to be run in a much more financially stable and sustainable fashion.

Rather than a points deduction, there should be a demotion of at least 2 divisions (if not more). Players contracts arn't the priority when it comes to any administration process as they are now so if this happens, they should be paid out in the same way that claims by everyone else including small businesses, etc are resolved (ie ?p in the pound)

Club losses should be available for potential signings to see before joining a club so that they can question if the club is secure finacially and they are likely to be paid fully for their services over the full period of their contract. This way they have to weigh up the risks of signing for a team with a big debt, knowing that should the club go bust, that they will not get everything they are owed, meaning that clubs that can afford the better players will be able to sign them (hopefully this would have with the wage inflation problem too)

The owner can't guarantee the debts of the club ... it's these cases that when an owner does a runner or simply doesn't have the assets to cover the debt that many of the problems occur

For me it's pretty simple ... owners can fund a club but if they are signing players to contracts and making other financial commitments that go beyond the reasonably expected income of the club then they have to do more than guarantee; they actually stump up the cash to cover (equity or some escrow account). If a club is relegated from the Prem then they shouldn't get parachutes until all of their (PL based) commitments are covered with the parachute money and then they can get the rest

Blindingly simple (yes it would need ironing out) and not overly difficult to administer

 

[Gritt23]

Is it a coincidence that they are meeting on Friday ... 1 day before QPR potentially cop a massive fine for getting promoted with huge losses from 2012-13?

 

[father_and_son]

The owner can't guarantee the debts of the club ... it's these cases that when an owner does a runner or simply doesn't have the assets to cover the debt that many of the problems occur

For me it's pretty simple ... owners can fund a club but if they are signing players to contracts and making other financial commitments that go beyond the reasonably expected income of the club then they have to do more than guarantee; they actually stump up the cash to cover (equity or some escrow account). If a club is relegated from the Prem then they shouldn't get parachutes until all of their (PL based) commitments are covered with the parachute money and then they can get the rest

Blindingly simple (yes it would need ironing out) and not overly difficult to administer

It really is this simple. Any club with any owner is allowed to buy any player.... but the club must satisfy the FL that the have sufficient cash on deposit to settle the long term liability (wages).
Unfortunately it requires all the clubs to be solvent up front. Doubt many clubs would meet this basic prerequisite never mind having spare cash on reserve.

All financial services work to pretty much this basic model but they have turnover in excess of liabilities (ie make a profit) considerably more often than football clubs do!

Its a brilliant idea but could not be implemented until, say 10 years of FFP and clubs being forced to operate in a solvent fashion and clear their ST debts.

 

[seagullsovergrimsby]

Is it a coincidence that they are meeting on Friday ... 1 day before QPR potentially cop a massive fine for getting promoted with huge losses from 2012-13?

Any promoted team overspending will see a fine (or fair play tax) going to charity and applies to the accounts for the 2013/2014 season which have to be filed in December this year. I personally think the FL will bottle it over teams who don't go up and have overspent by declaring an amnesty so there will be no transfer embargo in January 2015 and for this punitive measure to be put on hold to avoid legal challenges on restrictive trade practices under current EU legislation.

 

[Chicken Runner61]

I have some worries with the whole of the FFP idea - Whilst some clubs have gone bust and even with FFP they probably still will making clubs associate wages and expenditure to a set financial model will only encourage clubs to move into other business areas which have nothing to do with the roots of our game.

Do we really want a football club that bases its activities on and off the field on what businesses it runs in the back ground? Doesn't a club that needs to have a hotel within its books or any other business activity become more and more tied to the corporate yoke?

The trouble with FFP is that is makes clubs more like businesses rather than community or fan based enterprises and it makes businesses more likely to be involved because its a level playing field for what happens in the accounts rather than on the field.

We all thought Portsmouth were mad and reckless to put themselves in so much debt and whilst their short lived glory left a bitter taste in our mouths they have had their comeuppance in a way.

If clubs have to balance their books and real fans that want to invest are shut out because they can't lend money to a club because the books don't balance isn't that going to make it easier for say Toyota UK to become involved in a club and filter both profits and losses through its associated club whilst being able to enjoy corporate entertainment at the expense of average joe fans?

It all well having someone sponsor the club but i don't want them picking the players or deciding how much my season ticket is going to cost - the point being that we have gone from a game owned by local fans and local businessmen where clubs succeeded or failed by the amount of money their fans and owners ploughed into it to a business where corporate enterprises buy into clubs to sell their products to the fans that follow them.

The bit that doesn't work is that whilst a real fan will live breath eat and die for the club he pledges allegiance to and is prepared to put up with a lot of hard times with little success for that club probably the only thing that would wreck that love and that passion is to find his club owned by a business or enterprise miles from the ground thats interest lies with what they get out of their investment.

My worry is that FFP actually takes away some of the soul of a club, it could make it easier to franchise and move a club or to create a corporate named Harlem Globetrotters team that exists to win competitions not for its fans but the brands that bought into it.

 

[Rugrat]

It really is this simple. Any club with any owner is allowed to buy any player.... but the club must satisfy the FL that the have sufficient cash on deposit to settle the long term liability (wages).
Unfortunately it requires all the clubs to be solvent up front. Doubt many clubs would meet this basic prerequisite never mind having spare cash on reserve.

All these so called Gazillionaires taking over clubs ... to put a mere £20/30/40 Million on deposit shouldn't bother them

Like the fella at Leeds .. "put your money where your mouth is" .. if he's got it good on him.We live in a free market economy and if he wants to throw his life savings into a football club then go ahead.

As long as it's sustainable (f**k I hate that word) for the period of the financial obligations of **** club then why not? (Purists aside who didn't notice Murdoch

 

[Chicken Runner61]

How do you have sufficient cash on deposit to settle long term liabilities?


What is long term? Do you think your employers have sufficient cash on deposit for say six months of your wages?


If you have gazzilions does it really matter about the club making a loss? Is buying a trophy because you can afford to ethical?


If you are gambling with a clubs finances to win a trophy is it any less ethical or worse when that club goes down the pan.


If you obey FFP rules but can never compete with the big clubs will you feel better or worse if you never get anywhere?

Rangers are a good example of why nothing is straight forward in football, with all their fans they should easily meet all their financial obligations easily but they went bust. They only have one main competitor the rest of the clubs exist to make them feel good. Despite having loads of fans, winning most games and only having to really compete with Celtic they still went pop because they over stretched themselves. With FFP they should still be one of two big clubs and with their fan base should still be able to pay higher wages and attract better players than everyone else in Scotland (except Celtic) so how will FFP help any other club there. I think it will just make the finances more complex.

 

[andy1980]

It seems there was 4 proposed changes and they were all defeated so no changes. It needed 75% vote to change and lthough it had a majority, it wasn't 75% majority.